CFPB Seeks Input on Mortgage Closing Process
As part of its “Know Before You Owe” initiative, the Consumer Financial Protection Bureau (CFPB) is reaching out for feedback on the mortgage closing process.
CFPB says the mortgage closing process is often stressful and confusing for consumers and is usually their last opportunity to gain and verify information regarding the major long-term financial commitment that is purchasing or refinancing a home. CPFB hopes to gather more information on the specific closing issues that consumers and professionals find the most problematic.
CFPB announced January 3 that they are inviting public comments and answers to specific questions regarding the loan closing process. According to a recent article from Mortgage News Daily, CFPB is hoping to receive responses from a wide range of participants, including consumers, mortgage lenders and servicers, real estate professionals, housing counselors, real estate attorneys, settlement agents, consumer and community advocates, and anyone else that is interested in the mortgage closing process.
Respondents are encouraged to address the general subject areas as well as the specific questions therein:
Consumers and Closing
- What are common problems or issues consumers face at closing? What parts of the closing process do consumers find confusing or overwhelming?
- Are there specific parts of the closing process that borrowers find particularly helpful?
- What do consumers remember about closing as related to the overall mortgage/home- buying process?
- How long does the closing process usually take and do borrowers feel this time is of appropriate length?
- How empowered do consumers seem to feel at closing? Did they come to closing with questions? Did they review the forms beforehand? Did they know that they can request their documents in advance? Did they negotiate?
- What, if anything, have you found helps consumers understand the terms of the loan?
Errors and Changes at Closing
- What are some common errors you have seen at closing? After closing? How are these errors detected, if at all?
- What changes often surprise consumers at closing? How do consumers react to changes at closing?
Other Parties at Closing
- How, if at all, do consumers typically seek advice during closing? In person? By phone? Online?
- Where and to whom do consumers turn for advice during closing? Whom do they typically trust?
- What documents do borrowers usually remember seeing? Signing?
- What documents do consumers find particularly confusing?
- What resources do borrowers use to define unfamiliar terms of the loan?
- What, if anything, would you change about the closing process to make it a better experience for consumers?
- What questions should consumers ask at closing? What are the most important pieces of information/documents for them to review?
- What is the single most important thing a consumer should do before coming to the closing table?
Responses Due Before February 7
The responses must be submitted on or before February 7 in order to be included in the study.
According to Mortgage News Daily, CFPB hopes the responses “will lead into a project to increase consumer knowledge, understanding, and confidence at closing as the mortgage industry increases its usage of technology, electronic signatures, and paperless processes.”
You can find more information on submitting your comments at the Federal Register webpage.
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